MLB: Are No-Trade Clauses Damaging the Game?

Many MLB teams around the league offer no-trade clauses as a way to sweeten contracts and sign the top players, but do those agreements hurt the league overall?

Catcher Jonathan Lucroy made headlines at the MLB trade deadline when he used his no-trade clause to reject a deal that would have sent him to the Cleveland Indians in exchange for some of the Tribe’s best prospects.

Instead, Lucroy ended up with the Texas Rangers – one of the only teams the Brewers could deal him to without threat of a veto.

In a USA Today article last week, Houston Astros general manager Jeff Lunow told columnist Bob Nightengale that he wished other teams would stop giving no-trade clauses to their free agents. The Astros had been in the running for Lucroy, and this wasn’t the first time they missed out on a player who held veto power. Lunow also swung and missed on ace Cole Hamels, after the pitcher vetoed a deal that would have sent him to Houston in 2015.

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Like Lucroy, Hamels landed with the Astros’ division-rival Rangers. While those two trades alone aren’t why Texas has run away with the AL West, they certain didn’t help Houston’s chances.

Some might argue that Lunow’s disdain for the no-trade clause is just bitterness, and it probably is. Even still, he brings up a valid point.

One of the primary focuses of MLB over the last decade has been increasing competitive balance through revenue sharing and other tactics. The penalties associated with exceeding the luxury tax threshold have increased over time. Clubs can now offer their pending free agents a “qualifying offer”, which allots an extra draft pick to the organization if the player signs elsewhere.

For a league that has made such an effort to give every team a chance to win, MLB has largely ignored the impact of no-trade clauses that are offered as part of free agent deals.

The 5/10 Rule gives all players the right to veto a trade after they have ten years of service time, including having spent the last five years with their current team. But adding full or partial no-trade clauses into contracts for superstars who haven’t earned them via service time gives a decidedly unfair advantage to teams with bigger payrolls.

When Albert Pujols entered free agency, he negotiated with the Miami Marlins before signing in Los Angeles. The fact that Miami’s front office doesn’t offer no-trade clauses was one of the biggest reasons he went elsewhere. While players are permitted to do this, it truly hurts teams that can’t afford to hand out those clauses.

An organization with a higher payroll – for example, the Angels – can afford to take on the risk of a no-trade clause. Even though they’re a last place team this season, they haven’t discussed a big sell-off. If they swing and miss, they don’t need to trade away their superstars to make room on the payroll for new players.

On the other end of the spectrum, a team like the Astros can’t afford to give out no-trade clauses. If they agree to a big contract, they need the flexibility to trade that player later. Small market teams use trades to fix holes in their roster, since they aren’t able to pay free agents as easily as big market teams. Issuing no-trade clauses hinders that option.

Players are also more likely to have underperforming teams in their partial no-trade clause. Yes, it’s partially about where they would like to live and raise their family, but for most players, the Yankees or the Dodgers would never be on their “no trade” list. That’s where the money and attention are. Small-market cities and last-place teams are often on the lists instead.

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While no-trade clauses aren’t MLB’s biggest issue, Lunow’s comments bring to light the fact that the league has largely ignored this aspect of keeping things competitive. There’s no chance that the players’ union will agree to eliminate the clauses from free agent deals, but teams deserve the right to think they’re a very frustrating part of the game.